766421--2/20/2008--ALASKA_AIR_GROUP

related topics

{cost, regulation, environmental}

{cost, operation, labor}

{system, service, information}

{customer, product, revenue}

{operation, natural, condition}

{product, market, service}

{condition, economic, financial}

{competitive, industry, competition}

{loss, insurance, financial}

{debt, indebtedness, cash}

{personnel, key, retain}

{stock, price, share}

The airline industry is highly competitive and subject to rapid change. We may be unable to compete effectively against other airlines with greater financial resources or lower operating costs, or to adjust rapidly enough in the event the nature of competition in our markets changes. Our business, financial condition, and results of operations are substantially exposed to the current high prices and variability of jet fuel. Further increases in jet fuel costs would harm our business. A significant increase in labor costs or change in key personnel could adversely affect our business and results of operations. Our failure to successfully reduce unit costs at both Alaska and Horizon could harm our business. Our indebtedness and other fixed obligations could increase the volatility of earnings and otherwise restrict our activities. Our operations are often affected by factors beyond our control, including changing economic and other conditions, which could harm our financial condition and results of operations. We depend on a few key markets to be successful. The airline industry continues to face potential security concerns and related costs. Increases in insurance costs or reductions in insurance coverage would harm our business, financial condition and results of operations. Our reputation and financial results could be harmed in the event of an airline accident or incident. We rely heavily on automated systems to operate our business, and a failure of these systems or by their operators could harm our business. We rely on partner airlines for codeshare and frequent flyer marketing arrangements. We rely on third-party vendors for certain critical activities. We are dependent on a limited number of suppliers for aircraft and parts. Changes in government regulation imposing additional requirements and restrictions on our operations or on the airports at which we operate could increase our operating costs and result in service delays and disruptions. The market price of our common stock may be volatile.

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766421--2/20/2008--ALASKA_AIR_GROUP_INC